US Treasury Secretary Timothy Geithner on Saturday urged China to allow its currency to appreciate as part of wider economic reforms, AFP reported. "China has laid out very ambitious reforms designed to help strengthen growth in household income, consumption growth and to strengthen domestic demand," Geithner said. "A necessary part of that reform is to resume reform of their exchange rate mechanism." He was speaking after a meeting of the Group of 20 finance ministers at which China’s currency policy was discussed. Separately, IMF Managing Director Dominique Strass-Khan said that his organization still believes the renminbi to be substantially undervalued and that “something obviously has to be done.” However, he noted that even a 20-25% appreciation against the US dollar would not resolve global imbalances. The renminbi was effectively pegged at about 6.8 to the dollar in mid-2008 in response to the global financial crisis, after rising by more than 20% since 2005.
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